Capital gains
Hi Terry. All HR Block offices are temporarily closed by me. Tried asking Realtor Attorneys but they won’t answer a question before paying. I need to know If My primary home is in Illinois, I divorced my wife after 40 years. We sold secondary house in Florida. Gained large ammount and split it. Now I gave her 1/2 of property value in Illinois to keep on my own can I offset 30% capital gains on sale in Florida with 1/2 spent to buy out my primary house.? Owned both properties for just over two years. Please help. Divorce was expensive. Don’t wanna pay for information only. Thanks
Terry Says
First, there is no tax consequence to a split of marital assets. I’m assuming from what you wrote that you kept the house and gave her cash. When you eventually sell the Illinois house, you can exclude $250,000 of gains from taxes because it is your primary residence. (That’s assuming that you don’t remarry and file a joint return, which would allow a $500,000 exclusion!)
If the house in Florida was owned jointly, you are each responsible for paying the capital gains on the sale of that house. Her responsibility to pay half should have been spelled out in your divorce decree. But be warned, that the IRS can come after YOU if she fails to pay her half. Now, if the house was in YOUR name, then you owe all the taxes on the gain on sale!
